John Davi

John Davi runs Astoria Advisors, an asset management firm with about $2 billion in total assets across three verticals: financial advisors, corporations and small institutions, and ultra-high-net-worth individuals. The firm's investment philosophy sits at the intersection of macro and quantitative analysis, and they've been operating since 2017. Davi is a recurring guest on Behind the Ticker, having previously discussed ROE and PPI. This time he's back for the three-peat to talk about his newest fund.

On this episode, John joins Brad to discuss GQQQ (which he calls "G Triple Q"), the Astoria U.S. Quality Growth Kings ETF. It's designed to marry growth and quality investing in a way that most passive growth ETFs don't, addressing what Davi sees as a concentration and quality problem in existing products.

Why Growth Needs a Quality Filter

Davi's pitch starts with a problem statement: most growth ETFs are just market-cap weighted with no quality filter. The Nasdaq 100, in its most extreme form, only requires that a company be a non-financial in the top 100 by market cap. There's no screen for quality at all. Goldman Sachs has a chart showing the top 10 stocks' share of the S&P 500 is at all-time highs, with the last comparable reading coming from 1928, right before the Great Depression. When concentration is this extreme, quality becomes essential.

Davi recalled a specific example from the passive index world: a fraudulent Chinese company that stayed in the index even after it stopped trading. Active quality screening avoids those traps entirely. "Growth investing has done exceptionally well," he acknowledged. "But a lot of the growth ETFs out there right now are just market-cap weighted with not even a lot of thoughtful intelligence." GQQQ is designed to bring thoughtful construction back to the growth sleeve.

Quality Metrics and Portfolio Construction

GQQQ starts with a universe of large-cap and mid-cap growth stocks, applies minimum market cap and liquidity screens, then ranks on quantitative quality factors including ROA, ROIC, and related metrics. The fund targets the intersection of growth and quality: companies where growth is strong but fundamentals are sound. The portfolio is annually rebalanced with quarterly quality reviews. If a stock significantly deranks on the quality metrics between annual rebalances, it can be replaced.

The result is a portfolio with a lower multiple than pure growth alternatives. The P/E on GQQQ runs around 23, compared to about 27 on the Nasdaq. The fund also uses a modified market-cap weighting approach that caps the weight on the largest names, which Davi predicts will become a broader trend. "I predict that in the years to come, you're going to start seeing a lot of capped-index-weight products," he said. By going down the market range into mid-cap names, the fund finds opportunities like AppLovin, which was in the portfolio when it launched in October 2023 and has since risen roughly 700%. The Nasdaq index didn't add AppLovin until December, after the run.

Positioning for Advisors

Davi positions GQQQ between SPY and QQQ in terms of both sector weight and expected performance. For advisors already running diversified model portfolios, it's a complement to existing growth exposure. For advisors with concentrated large-cap growth, the pitch is straightforward: nobody pushes back on the idea that Mag Seven concentration is at historic extremes. If taxes aren't a constraint, take some profits and rotate into something with a quality filter. For advisors who can't sell for tax reasons, GQQQ works as a quality-growth alternative for new money.

The fund is priced at 35 basis points, competitive for a smaller issuer with active management. Davi's broader firm philosophy is that diversified investing has meant being underweight tech, which has been painful over the past several years. GQQQ gives advisors a way to own tech and growth with quality guardrails. It's not just tech, though: the quality filter surfaces names across sectors that benefit from AI, including energy, industrials, and financials.

Three-Time Guest and Conviction

Brad noted that Davi is the first three-peat guest on Behind the Ticker. The prior appearances covered ROE and PPI, Astoria's other ETFs. This isn't a one-product firm. With $2 billion across advisors, institutions, and ultra-high-net-worth clients, Astoria has the scale and the track record to support multiple products. The macro-quant philosophy is consistent across all of them: systematic, rules-based, but with active monitoring and the ability to act on deteriorating fundamentals. Davi's conviction on quality growth is grounded in the data: quality as a factor is persistent, pervasive, and strong across market cycles. The current moment, with concentration at historic extremes, is where that quality filter matters most.

Key Takeaways

• GQQQ applies quantitative quality screens (ROA, ROIC) to a large and mid-cap growth universe, annually rebalanced with quarterly quality reviews, at 35 basis points.
• The portfolio multiple runs around 23x P/E versus 27x on the Nasdaq. Modified market-cap weighting caps the largest names to reduce concentration risk.
• AppLovin was in the portfolio from launch in October 2023, up roughly 700% before the Nasdaq index added it in December. Mid-cap inclusion captures emerging leaders early.
• Goldman Sachs data shows top-10 stock concentration in the S&P 500 is at all-time highs, comparable to 1928. Quality-filtered growth is more relevant than ever.
• John Davi is the first three-peat guest on Behind the Ticker. Astoria manages about $2 billion with a macro-quant philosophy across three client verticals.

Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.